UNEP/OzL.Pro/29/6

UNITED
NATIONS / EP
UNEP/OzL.Pro.29/6
/ United Nations
Environment
Programme / Distr.: General
19 November 2017
Original: English

Twenty-Ninth Meeting of the Parties to
the Montreal Protocol on Substances
that Deplete the Ozone Layer

Montreal, Canada, 20–24 November 2017

Item 4 of the provisional agenda of the high-level segment[*]

Presentation by the Chair of the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol on the work of the Executive Committee

REPORT OF THE EXECUTIVE COMMITTEE OF THE MULTILATERAL FUND
FOR THE IMPLEMENTATION OF THE MONTREAL PROTOCOL
TO THE TWENTYNINTH MEETING OF THE PARTIES

Introduction

1.  The present report covers the activities undertaken by the Executive Committee since the TwentyEighth Meeting of the Parties[1] and consists of four parts dealing with: policy matters related to the Kigali Amendment; other policy matters; projects, their implementation and monitoring; and business planning, administrative and financial matters.

2.  During the reporting period, the 77th and 78th meetings of the Executive Committee were held in Montreal, from 28November to 2December2016 and from 4to7April2017, respectively, the 79thmeeting was held in Bangkok from 3 to 7July2017 and the 80th meeting was held in Montreal from 13to17November2017. The reports[2] of those meetings are available on the Multilateral Fund’s web site (www.multilateralfund.org).

Attendance

3.  The 77th meeting was attended[3] by Austria, Belgium, Canada, Germany, Japan, the United States of America, representing parties not operating under paragraph 1 of Article5 of the Protocol (non-Article 5 parties), and by Argentina, Cameroon, China, Egypt, India, Jordan and Mexico, representing parties operating under paragraph 1 of Article 5 of the Protocol (Article 5 parties). The meeting was chaired by Mr. Agustín Sánchez (Mexico), with Mr.Paul Krajnik (Austria) as Vice-Chair.

4.  The 78th, 79th and 80th meetings were attended[4] by Australia, Austria, Belgium, Germany, Japan, Slovakia and the United States of America, representing non-Article 5 parties, and by Argentina, Bosnia and Herzegovina, Cameroon, China, Lebanon, Mexico and Nigeria, representing Article 5 parties. The meetings were chaired by Mr.PaulKrajnik (Austria), with Mr. Mazen Hussein (Lebanon) as Vice-Chair.

5.  The 77th, 78th, 79th and 80th meetings were also attended by representatives of the implementing agencies, namely, the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), both as implementing agency and Treasurer of the Multilateral Fund, the United Nations Industrial Development Organization (UNIDO) and the World Bank; by representatives of the Ozone Secretariat, the Technology and Economic Assessment Panel and the Implementation Committee under the Non-Compliance Procedure for the Montreal Protocol; and other observers.

I.  Policy matters RELATED TO THE KIGALI AMENDMENT

6.  At its 77th meeting, the Executive Committee considered issues relevant to the Executive Committee arising from the Twenty-Eighth Meeting of the Parties to the Montreal Protocol[5]. Those discussions led to the decision to hold a special, four-day meeting to address solely matters arising from decision XXVIII/2 of the Meeting of the Parties, and potential additional contributions to the Multilateral Fund for activities related to the HFC phase-down. The Fund Secretariat was requested to prepare a document containing preliminary information in response to the elements in decision XXVIII/2 that requested the Executive Committee to take action (decision 77/59). Those issues were pursued over subsequent meetings. A list of documents considered and the decisions taken in relation to matters arising from the Kigali Amendment over the reporting period, in full, can be found in Annex I to the present report.

(i)  Additional contributions to the Multilateral Fund

7.  At the 77thmeeting, the Executive Committee accepted, with appreciation, the additional contributions to the Fund announced by a number of non-Article 5 Parties to provide fast-start support for implementation of the Kigali Amendment, noting that such funding was one-time in nature and would not displace donor contributions. The additional contributions were to be made available for Article 5 countries that had HFC consumption baseline years from 2020 to 2022 and that had formally indicated their intent to ratify the Kigali Amendment and take on early HFC phase-down obligations in order to support their enabling activities. The Executive Committee requested the Secretariat to develop a document describing possible procedures for those countries in accessing the additional faststart contributions for enabling activities (decision 77/59).

8.  At its 78thmeeting, the Executive Committee considered draft procedures in accessing the additional contributions proposed by the Fund Secretariat[6]. Unable to reach consensus on all of the elements thereof, it deferred further consideration of the matter to its 79th meeting. At the 79th meeting the Committee returned to the draft procedures as part of its discussions on enabling activities and related draft guidelines (see Enabling activities required to assist Article 5 countries in commencing their reporting and regulatory activities in relation to the HFCcontrol measures, below).

(ii)  Available information on HFC consumption and production, as well as on HFC23 byproduct, including from surveys of ODS alternatives funded by the Multilateral Fund and other sources

9.  At its 74th meeting, in response to the decision XXVI/9 of the Meeting of the Parties, the Executive Committee had considered requests for funding surveys of ODS alternatives and, by decision74/53(h), requested the Secretariat to provide an overall analysis of the results of the surveys for its consideration by its first meeting in 2017. At the 77th meeting, the Committee urged bilateral and implementing agencies to take appropriate action in order to complete and submit, by January 2017, as many reports as possible on surveys of ODS alternatives to enable the Secretariat to provide an analysis of the results of such surveys (decision77/8). Furthermore, decision77/59 on addressing matters related to the Kigali Amendment called for the document containing preliminary information, that would be prepared by the Secretariat, to address the issue of available information on HFC consumption and production, as well as on HFC23 by-product, including from surveys of ODS alternatives funded by the Multilateral Fund and other sources. At the 78thmeeting, therefore, the Secretariat presented the initial results of surveys of ODS alternatives from 30Article 5 countries, focusing on HFC consumption[7] only. Subsequent to a discussion, the Executive Committee urged bilateral and implementing agencies to work with relevant Article 5 countries to complete and submit, no later than 8 May 2017, as many ODS outstanding reports on alternative surveys as possible (decision 78/2) in preparation for the 79th meeting. At that meeting, the Executive Committee then reviewed an overall analysis of the results of the ODS alternatives surveys that had been submitted by the time of that meeting[8]. As responses had been received for less than half of the surveys for which funding had been approved at previous meetings, the Executive Committee urged bilateral and implementing agencies to work with relevant Article 5 countries to complete and submit all outstanding surveys on ODS alternatives no later than 18September 2017, requesting the Secretariat to submit, to the 80th meeting, an overall analysis of the results of the surveys of ODS alternatives, updated to include all surveys submitted by that date (decision79/43).

10.  After considering that report[9] at the 80th meeting, the Executive Committee requested bilateral and implementing agencies to use the findings and the lessons from the results of the surveys of ODS alternatives when undertaking enabling activities, with particular attention to strengthening data collection and reporting on HFCs and HFC blends. The Committee noted the experience acquired by countries in completing the survey and the lessons learned, which would help countries develop data-gathering systems with a view to establishing their HFC baselines. Noting, however, the limited information provided in the report with regard to non-HFC alternatives, the Committee requested the Secretariat prepare an addendum to the report[10] providing information and data on nonHFC alternatives reported in the surveys (decision 80/75).

(iii)  Information relevant to the development of the cost guidelines requested from the Executive Committee: Draft criteria for funding the phase-down of HFCs

11.  At its 78th meeting, the Executive Committee considered information relevant to the development of criteria for funding the phase-down of HFCs in Article 5 countries[11]. Among the issues discussed were: the overarching principles and timelines; according Parties flexibility in implementation; the cut-off date for eligible capacity; second and third conversions; sustained aggregate reductions; eligible incremental costs; energy efficiency; capacity building to address safety; disposal and eligibility of AnnexF substances subject to highambienttemperature exemptions.

12.  The Committee made modifications to the proposed template for the draft cost guidelines[12] on the basis of decisionXXVIII/2 in relation to: flexibility in implementation that enabled Parties to select their own strategies and priorities in sectors and technologies, cut-off dates for eligible capacity, and second and third conversions. It also decided on eligible categories of costs for the consumption manufacturing sector.

13.  The Committee also agreed to consider approving a limited number of HFC-related projects in the manufacturing sector only, without prejudice to different kinds of technology, no later than at the first meeting of 2019, to allow the Committee to gain experience in the incremental capital costs and incremental operating costs that might be associated with phasing down HFCs in Article 5 countries. That would be on the understanding: that any Article 5 country that submitted a project should have ratified the Kigali Amendment or submitted a formal letter indicating the government’s intention to ratify the Amendment; that no further funding would be available until the instrument of ratification had been received by the depositary at the Headquarters of the United Nations in New York; and that any amount of HFC reduced as a result of the project would be deducted from the starting point.

14.  With regard to other matters discussed in relation to the development of the cost guidelines for the phasedown of HFCs in Article 5 countries, the Executive Committee requested the Fund Secretariat to prepare a document for consideration by the Executive Committee at its 79thmeeting, including a summary of the issues pending, such as eligible incremental costs (consumption manufacturing, production sector, refrigeration servicing sector, and other costs), energy efficiency, capacity building to address safety, disposal, and eligibility of Annex F substances subject to high-ambient-temperature exemptions (decision78/3).

15.  At its 79th meeting, the Executive Committee considered the document prepared by the Secretariat pursuant to decision 78/3[13]. Following a discussion, it decided to develop guidelines for funding the phase-down of HFC consumption and production for submission to the Thirtieth Meeting of the Parties in 2018, and to finalize the guidelines as soon as possible thereafter, taking into account the views and input provided by the Parties. It agreed that, in line with paragraph 11 of decision XXVIII/2 on overarching principles and timelines, the Chair of the Executive Committee would report in relation to the HFC phase-down to the Twenty-Ninth Meeting of the Parties on the progress of the Executive Committee in developing cost guidelines for funding HFC phase-down, and to future Meetings of the Parties on progress made, including on cases where Executive Committee deliberations had resulted in a change in a national strategy or a national technology choice submitted to the Executive Committee (decision 79/44).

16.  Also at the 79th meeting, in relation to criteria for considering the limited number of HFC-related projects, in the manufacturing sector only, pursuant to decision78/3(g), the Executive Committee reiterated the provisions of that decision, namely that the submitted projects: would be considered on a case-by-case basis; should be in individual enterprises deciding to convert to mature technologies; should have broad replicability to the country or region or sector; and should take into account geographic distribution. The projects must also be fully implemented within two years of their approval; that the relevant project completion reports should be comprehensive with detailed information on the eligible incremental capital costs, incremental operating costs, any possible savings incurred during the conversion and relevant factors that facilitated implementation; and that any remaining funds should be returned to the Multilateral Fund no later than one year after the date of project completion, as per the project proposals.

17.  Furthermore, the Committee decided: that potential projects should be included in the bilateral and implementing agencies’ 2018 to 2020 business plans for submission at the 80th meeting or in subsequent business plans, as appropriate; that it would consider further stand-alone investment projects on a rolling basis after the first meeting in 2019; and that any proposal submitted and approved for funding at the 80thmeeting would be funded, to the extent possible, from additional voluntary contributions provided by nonArticle 5 Parties, after giving priority to enabling activities (decision 79/45) (see Enabling activities required to assist Article 5 countries in commencing their reporting and regulatory activities in relation to the HFC-control measures, below).

18.  At the 80th meeting, the Committee considered and approved one stand-alone HFC investment project and preparation for eight stand-alone HFC investment projects in the domestic refrigeration, commercial refrigeration and foam sectors under additional voluntary contributions (see Investment and Non-investment projects, below).

19.  At the 80th meeting, the Executive Committee pursued its discussions on the development of guidelines for funding the phase-down of HFC consumption and production on the basis of a document prepared by the Secretariat pursuant to decision 79/44[14]. It decided on a number of elements to be included in the draft template for cost guidelines: text related to sustained aggregate reductions in line with paragraph 19 of decisionXXVIII/2; text related to the eligibility of AnnexF substances subject to highambienttemperature exemptions, in line with paragraph 35 of decision XXVIII/2; for the production sector, the categories of costs in sub-paragraph 15(b) of decision XXVIII/2; and, for the refrigeration servicing sector, the categories of costs in sub-paragraph 15(c) of decision XXVIII/2.

20.  Also in relation of the refrigeration servicing sector, the Executive Committee requested the Secretariat to prepare a preliminary document for the 82nd meeting, in cooperation with bilateral and implementing agencies, on all aspects relating to that sector that supported HFC phase-down. That document should take into account: previous policy documents, case studies, monitoring and evaluation reviews, and the work undertaken by bilateral and implementing agencies in developing and implementing training and technical assistance programmes. It should also contain analysis of the existing capacities in Article 5 countries that had had funding approved for the refrigeration servicing sector and how those capacities could be utilized for HFC phase-down. The analysis should look at: the results of funded recovery, recycling and reclamation activities and the provision of servicing tools, and their potential to reduce refrigerant emissions; involvement of the private and/or public sector (e.g. equipment, components and refrigerant suppliers) in introducing and adopting alternatives in the servicing sector; health and safety standards, protocols and equipment (including protective equipment) available for alternatives; training and certification programmes; and energy efficiency in the servicing/end-user sector. The final element of the requested document was the minimum information needed for the development of training and competency-based certification programmes and modules for service technicians and customs officers for the transition to alternatives (decision80/76).